How to set your financial goals

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And while some people can just put money in a jar for no reason and keep it there, I'm certainly not one of them.

If there's free money going, I'll spend it.

Which is why it pays to assign it to something - in other words - set some goals.

Since I've made a plan for my money, it has become far less unruly and even, dare I say it, manageable. But before I could make the plan, I had to set some goals.

As highlighted in yesterday's post, the big ones for me are house and travel. For others, it could be anything from a pair of Louboutins, to a new car, to an upcoming dentist's bill.

Whatever the need (or want), one of the most effective ways to put money aside (and keep it aside), is to have something tangible to work towards.

Think about what you want in life and base your money decisions on that. Set goals for the short, medium and long term. Make them realistic and write them down.

Business consultant and personal finance columnist Joan Baker said it was important to set goals because it helped people draw lines between what was important them and their money.

"Goals are incredibly important. Human beings seek meaning, and goals help people connect their money to things that have meaning for them."

Don't choose a goal where the posts are liable to change all the time, and don't choose a goal where the posts are too far away - Dan Carter has a great boot on him, but the man has limits.

"If you set goals that are too hard, you tend to give up on them very easily," Baker said.

"But don't choose things that are so simple that they're pointless."

She said the best way to set a goal was to identify an area that you know you need to work on, and one that you can take actual steps on.

Depending on where you're starting from, your goal setting might be more simplistic for example, your goal might be to have $1000 put away by Christmas to get you through the season.

If you're able to hold it together for longer or if you're at that stage in life, then go for the bigger goal - a house deposit, or to pay cash outright on a car.

But - and it took me a while to figure this out - there's no point saving too much money each pay and then finding you've run out of money to get you through the week. That's when you find you have to dip back into your savings for day-to-day living.

Baker said whatever the reason for saving, it was important to tag your money to something specific.